House Warns Freeport Divestment Will Be Complicated

Due to the more complicated divestment process, according to Kurtubi, the government should restore the issue according to the Contract of Work with Freeport which will be completed in 2021, without having to spend a dime to buying shares.

Member of Commission VII of the House of Representatives, Kurtubi said the development of PT Freeport Indonesia (PT FI) divestment process becomes complicated despite the fact that in August 2017, an agreement with Freeport has been reached that Indonesia will get 51 percent of the company's shares.

However, Kurtubi said, in its development as reported by the Minister of Energy and Mineral Resources (ESDM) Ignatius Jonan to Commission VII of the House, the 51 percent divestment process will be pursued through the purchase of a 40-percent participating interest from Rio Tinto Plc.

Due to the more complicated divestment process, according to Kurtubi, the government should restore the issue according to the Contract of Work with Freeport which will be completed in 2021, without having to spend a dime to buying shares.

"We appreciate the government's efforts to get a majority stake of 51 percent of PT Freeport Indonesia, but I advise the government to be more careful if the divestment process is done through the purchase of Rio Tinto's participating interest," Kurtubi said in a press release received Monday (1/29/2018).

Kurtubi said that actually Rio Tinto Plc is not a holder of Contract of Work with the Government of Indonesia. He said, the party who is required to divest is the work contract holder, namely PT FI.

"The government should not be carried away the scenario of PT FI, which seems to still not be willing to release its shares 51 percent to the Indonesian side, which could hurt Indonesia," he said.

The NasDem Party politician also remembers that PT FI's Contract of Work will be exhausted in 2021, which means there is only three years left. Therefore, he suggested the government to consider and not continue the divestment process that seems to have grown complicated.

Furthermore, he continued, it is in line with the Minerba Act that recognizes the Contract of Work until the completion of the contract. After 2021, it means that PT FI will automatically be 100 percent owned by Indonesia.

"After 2021, the state or government as the owner through Tambang State-Owned Enterprise will conduct special cooperation or other form with PT FI, but the control of the main operator is in the hands of Tambang State-Owned Enterprise, which would no longer be in the form of Contract of Work," he said.